October PPI Plummets by 2.9%! Manufacturing Prices Collapse, Economic Outlook Worrisome

The National Bureau of Statistics released the data on October 2024 PPI (industrial producer price Index) on Nov 9. Data show that in October, the country's industrial producer prices fell 2.9 percent year on year, and industrial producer purchase prices fell 2.7 percent. Compared with the previous month, industrial producer prices fell 0.1% month-on-month, industrial producer purchase prices fell 0.3% month-on-month, the decline has narrowed, down 0.5 percentage points. Specific to the chemical raw materials and chemical products manufacturing industry, its prices fell by 0.9% quarter-on-quarter and by 5.6% year-on-year.

In the cumulative data from January to October, both producer prices and purchase prices fell 2.1 percent from a year earlier. Among them, chemical raw materials and chemical products manufacturing prices fell by 4%.

In terms of the year-on-year changes in industrial producer prices in October, the prices of means of production fell by 3.3%, and the impact on the overall level of industrial producer prices was about 2.45 percentage points lower. In terms of breakdown, prices in the extractive industry decreased by 5.1%, prices in the raw materials industry decreased by 4.0%, and prices in the processing industry decreased by 2.9%. The price of means of living fell by 1.6%, and the impact on the overall level of industrial producer prices was about 0.41 percentage points. Broken down, food prices fell 1.6 percent, clothing prices fell 0.4 percent, general commodity prices rose 0.1 percent, and consumer durables fell 3.1 percent.

In terms of the purchase price of industrial producers, the price of ferrous metal materials fell by 6.9%, the price of fuel and power fell by 6.2%, the price of chemical raw materials fell by 5.3%, the price of agricultural and sideline products fell by 4.5%, the price of building materials and non-metals fell by 4.1%, and the price of textile raw materials fell by 1.9%. Prices for non-ferrous materials and wires rose 9.3 per cent.

As for the month-on-month changes in industrial producer prices in October, the price of means of production rose by 0.1%, which had an impact on the overall level of industrial producer prices of about 0.04 percentage points. In terms of breakdown, prices in the extractive industry decreased by 0.3%, prices in the raw materials industry decreased by 0.4%, and prices in the processing industry increased by 0.3%. The price of means of living fell by 0.4%, and the impact on the overall level of industrial producer prices was about 0.09 percentage points. By breakdown, food prices fell 0.3%, clothing prices remained unchanged, general commodity prices rose 0.3%, and consumer durables fell 1.1%.

In terms of the purchase price of industrial producers, the price of agricultural and sideline products fell by 1.4%, the price of chemical raw materials fell by 1.1%, the price of fuel and power fell by 0.8%, the price of building materials and non-metals fell by 0.2%, and the price of textile raw materials fell by 0.1%. Non-ferrous metal materials and wire prices rose 1.5 percent, and ferrous metal materials prices rose 0.1 percent.